Piracy is biggest challenge for music streaming in MENA, says Spotify

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Piracy remains the biggest challenge for music streaming platforms in MENA, despite growing competition in the sector, according to global firm Spotify.

It launched in the MENA region one month after French rival Deezer expanded to the region following a $266 million investment from Al Waleed Bin Talal through his wholly-owned subsidiary and largest record label in the region, Rotana Music.

Other competition includes Beirut-born streaming platform Anghami, which launched in 2012 and held the majority of the market share up until this year.

But speaking to Arabian Business, Spotify’s managing director of MEA Claudius Boller said the illegal consumption of music is the company’s main concern.

“Of course we look at competition, but our biggest challenge by far is piracy. It is a serious concern… But Spotify is an amazing alternative to piracy. It gives you access to music anywhere in world as well as music recommendations, which is something that piracy can’t offer,” he said.

Boller said while it will take time to convince consumers to switch to legal music streaming, reactions to Spotify in the region have been positive.

“It takes a while to convince an entire region to stop pirating music and consume music in a legal way, but our first numbers have been amazing,” he said.

Spotify launched in MENA in November this year after going public on the New York Stock Exchange in April with a market cap of just under $30 billion.

It is currently setting aside profitability to focus on attracting new users in the region, according to Boller, as well as educating artists on monetising their art.

“We’re not focusing on profitability at the moment. We’re focusing on boarding new users in the region… Every business wants to make a return, but Spotify is giving back a lot of money to labels and artists,” he said.

“We want to grow closely with the local artist community. There is a lack of education for artists about how they can monetise and get paid for their art and work in the new digital age,” he added.

Boller, however, said he is not worried about competition, as the market is "far from saturation" and remains undersized even in developing markets, where many users are just now getting onto digital streaming platforms.